Register a Business in Malta: A Guide for 2022

Malta is a popular and fast-developing economic center for many foreign investors and local enterprises. A firm can gain greatly from setting up an office in Malta, with the favorable tax laws in Malta. Additionally, the island attracts an increasing number of foreign investors who want to invest and set up a company in malta. This is because of its favorable legal system and up-to-date amenities.

Unlike other countries, company registration in Malta is very easy,  except for it’s a financial or medical field. This is because the licenses and restrictions are high compared to some other places. However, no matter your kind of business, it is important you know the various steps on how to go about it.

Recent Guide For Company Registration in Malta 

As stated before, company registration in Malta can be both simple and complex, depending on your business type. Some of these steps below may not apply to you, depending on the kind of business you want to register. If you come across any, kindly skip to the next. 

Proper Research and Consultancy 

You may wonder what this has to do with registering your business. It has everything to do with the registration of your business! You must have a proper understanding of the business you are driving into. This is because registering your business means that you are ready to start paying taxes. So, you must understand how to deal in this business to make a profit and pay tax without running at loss. Don’t be in a hurry; do your research and map out your plans.

Then after you have done all necessary research and are ready to register your business, the next will be to seek advice and help. You don’t have to go through all the steps of registration by yourself. Some firms and agents specialize in company registration in malta. They offer corporate solutions and services to businesses of all sizes, from start-ups to huge corporations. That is, they can advise you on how to invest and may also assist you in simplifying your registration. If you can contact these agents, you might not need to worry about the rest of the steps on this ladder.

Deciding if you Want a Limited Liability or Sole Proprietorship Company

Before embarking on Malta company registration, you have to decide between a sole proprietorship and a limited liability company.

A sole proprietorship is a type of business that is owned and operated by one person. Also, there is no legal separation between the owner and the business entity. It is also referred to as a sole tradership, individual entrepreneurship, or proprietorship.

Limited liability indicates that the company’s assets and liabilities are kept separate from the owner’s assets and debts. Therefore, if a corporation declares bankruptcy, creditors may only pursue the assets of the firm, not those of the owners personally.

By separating the corporation from the owner, a limited liability company safeguards the owner. Additionally, it has a more professional and official appearance, making it seem more impressive to potential clients. However, these advantages come with some extra red tape, like regular audits and having at least two shareholders listed on the registration.

The self-employed way requires fewer procedures and less paperwork for a more straightforward process. But without limited liability, the owner is personally vulnerable to lawsuits and liens. 

To set up a company in Malta, consideration must be given to starting the new business most advantageously. With the circumstances and kind of business in mind, conduct some study and give yourself plenty of time to do so. This will help you know which is best for your kind of business.

The Articles of Association and Memorandum

This paperwork will specify the authority granted to business directors as well as any restrictions or regulations that may apply. You must write these two crucial documents for a limited liability corporation and file them with the Registry of Companies. 

It is advised that a lawyer or specialist be consulted because these agreements can be filed. This could serve as the shareholders’ contract. However, this step is not required if you are self-employed. So if you run a sole proprietorship, you can skip this.

Deposit of the Minimal Share Capital 

Before any revenue begins to flow in, any new limited liability company will require a certain amount of capital to cover a variety of expenses. A part of the Memorandum and Articles of Association should specify how much money was invested as capital. Only 20% of the agreed-upon amount needs to be placed at a bank first. However, the minimum share capital must be greater than €1,200. 

When this money becomes available, tell the banker what it is for so that they can hold it separately until the new company is officially registered. A receipt from the bank will be provided; this is a crucial document that must be safeguarded for use in the next stage.

Register the New Company

Only limited liability firms are required to complete this stage, which entails delivering paperwork to the Financial Services Authority. 

First, a company registration form must be filled out and submitted to the authority along with the receipt for the bank’s share capital. You also have to submit the memorandum and the articles of association. There is a registration charge, but it just takes a few days to complete. 

Getting a Licence for Your Business

The majority of firms only need to fill out a brief form that describes their operations to obtain a license. There are extra licenses to apply for if you are opening a food outlet or beauty salon because those businesses have their unique requirements. The cost of the licenses varies depending on the kind of business established, among other factors. Moreover, although annual license payments will still be required, they might only be €70 for a small, straightforward business.

Obtain a Tax Identification Number

This process is very simple. There is no charge for the online form that you must fill out. Once you obtain the TIN, whether you are a limited liability corporation or self-employed, you must submit yearly tax returns. However, when it comes to submitting tax returns, it is generally advised that you get expert guidance to avoid errors, especially if you are unfamiliar with accounting.

Registering for VAT

A value-added tax, also known as a goods and services tax in some countries, is a type of tax that is assessed progressively. It is charged on the price of a product or service at each stage of manufacture, distribution, or sale to the final customer.

When a firm’s annual revenue surpasses €35,000, VAT is imposed. This necessitates that the company must be VAT registered. January through December is the tax year. The registration process is simple and free. 

However, registration for VAT purposes is not required when the turnover is between €7,001 and €35,000. In these situations, it is worthwhile to do more study on your best alternative and sometimes ask for guidance. 

Registering for a PE Number

All taxpayers who employ individuals in Malta must obtain a PE number, commonly known as a Permission to Employ number.

Only limited liability corporations need a PE Number since you will automatically be an employee. All you have to do is fill out the online application on the website of the Inland Revenue Department. Obtaining the PE number usually takes three days.

Reporting to the Employment and Training Centre

The Maltese government founded the ETC in 1990 to operate as a public employment service. They were formerly known as Jobs Plus. It offers a service that allows firms to recruit personnel and job searchers to apply for open vacancies. These services are available both online through the ETC web portal and at various locations throughout the island. ETC provides a variety of training options, ranging from basic skills to much more technical and advanced courses.

All enterprises are required to register with the ETC, which gathers all the information about employment registration for the island. For each new person hired when a new business is launched, a new form must be filled out. Additional paperwork needs to be completed and submitted after an employee is terminated. These procedures don’t cost anything and are simple to carry out.

Protection of Data

You must register your firm for data protection if your organization plans to gather sensitive and personally identifiable information from customers. Some precautions must be taken to safeguard the information you gather and maintain to keep your clients safe. 

It is important to follow European standards while preventing software breaches and data loss or theft. The integrity of the business may be irreversibly damaged. Moreover, fines for data loss can be quite high. Additionally, you must adhere to the GDPR standards when collecting data because Malta is a member of the European Union. The government’s website for data protection has more details.

Final Thought 

Malta is a good land to set up a company. However, just like in every other country, you have to know how to go about it. This is why at the beginning of this article you saw that it is advisable to consult agents who are specialized in professional advice. With these agents, you can scale through all the other steps easily.

Moreover, the institute in charge of business registration will trust you more if you work with these agents. However, if you choose to chase it all yourself, then be sure to take all you found in this article into action.